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Here’s How to Calculate the True Value of Your Time

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October 8, 2020 5 min read

Opinions expressed by Entrepreneur contributors are their own.

In , if you’ve heard it once, then you’ve heard it a thousand times —  is . But just how much money? If you’re freelancing or consulting, how do you figure out just what you’re worth to other people?

Related: 3 Ways to Figure out the Value of Your Time as an Entrepreneur

The alternative to the comparative, hourly default

To start, you might be tempted to just use a per-hour rate. You might look at what others make for similar work to set that rate for yourself.

However, this isn’t a great solution. You’ll quickly hit a ceiling in terms of production, because there are only so many hours in a day to do the real work and all the un-billable, behind-the-scenes tasks involved like . And let’s not forget that some clients like paying only a flat fee based on whether you finish a specific task, and that some projects will vary widely in terms of what’s required of you. 

To accommodate different situations and make sure you don’t limit yourself to only selling your hours, you want to focus instead on finding something that’s both scalable and in fantastic demand by a huge number of people. For example, I once did an analysis that looked at billionaires and how they’re distributed — this showed that the biggest or demand areas are housing, clothing, food, energy and computers. 

Now, the products or services within those areas might look very different in the future. But those basic categories aren’t going anywhere. So, find a niche within these groups where you can scale and scale and scale — the cloud is a great example. As you keep scaling up over time and your sales increase, your monetary value will get higher, too. And, to find that value at any given point along the way, all you have to do is divide your earnings by how much billable time you’ve put in. 

Let’s look at an example. Let’s say you’re the CEO of Company Awesome. You’re pulling in $100,000 a year. And let’s assume that you’re lucky to get 1,000 billable hours per year out of the 2,000 you could work. Doing the math ($100,000/1,000 hours) means you’re worth $100 per hour. Similarly, if you’re running a $200 million company and get in 1,200 billable hours, then your value is $200 million/1,200, which is a cool $166,666 per hour.

Every minute counts

Now, let’s step back for a second. Yes, this simple formula lets you figure out what you could stand to earn. That’s great for financial planning and living the way you want. But the bigger lesson is that every minute counts. When you understand what the true monetary value of your time is, you’re not going to waste the hours of your day. It’s easier to see that fooling around or being inefficient really does cost you, and that it’s monetarily beneficial to be as professional as possible.

The value of your team and experts

You can apply these ideas to your workforce, too. For instance, if you can attribute $500,000 in gains to somebody on your team and they worked 1,000 hours for you, then they’ve got an hourly value of $500. Don’t shortchange them. Every worker, regardless of level, deserves to understand what they’re worth to the business, and you should reevaluate pay regularly to ensure that you’re treating everybody fairly based on how the company’s doing. If that value doesn’t go directly into a paycheck, then they need to be able to see how you are reinvesting on their behalf to provide real security, safety and personal opportunity. Otherwise, they might assume that you’re simply lining your own pockets.

In the same way, when you bring in an expert and their rate looks absurd, take a pause. Think about how their work has translated into profits, market share or other assets at other businesses. If that yield is high, they might be well justified in asking for a particular rate. Or conversely, if you do your homework and find out that the yield is just ho-hum, you might be justified in negotiating a lower rate or just moving on to somebody else.

Related: Know Your Business’s Worth

The only truly limited resource that everyone has in common is time. Every moment you have matters. When you understand the worth of those moments based on earned yearly income and billable hours, you can keep yourself more accountable and advocate for yourself financially with confidence. And when you know the value of others’ time, it’s easier to treat them with fairness and respect, too. So, do the math. The equation is simple, and the unquantifiable benefits are free.

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Business

Money is love too: 5 lessons from immigrants to manage your wallet

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October 24, 2020 5 min read

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

Adina Chelminsky’s grandfather left Poland when he was just 13 years old and unable to speak a single word of Spanish. However, when he arrived at the port of Minatitlán in Veracruz, he had no money, but he began to work tirelessly until he managed to open a tlapalería that, believe it or not, continues to operate in Corregidora in Mexico City.

“The most important thing I know about finances I learned from my immigrant grandparents who came to Mexico with nothing,” said Chelminsky in her participation in MoneyFest 2020 . “My grandfather was a true entrepreneur because he knew that entrepreneurship was 50% sweat and not just having a ‘millionaire’ idea”.

Adina Chelminsky is not only an accomplished economist and entrepreneur, she is also the author of the popular finance book Cabrona y Millonaria . However, despite his academic training, he points out that the best lessons he has had on money management always come from immigrants ”.

“People like my grandparents who came to Mexico in search of opportunities understand better than anyone how to handle money in a crisis, because they know how to face adversity and prosper in a world they understand,” said the expert.

Image: Money Fest 2020

5 love lessons told with money

Adina’s two paternal grandparents, both immigrants, taught her five basic universal financial principles. “They not only left me with an unpronounceable last name [he says laughing], but also strategies that can be applied always and by everyone.”

1. There is no asset more valuable than education: Whether for one or the children, education is one of the smartest investments that can be made because it is a portable instrument that does not lose returns over time.

“When I was born, my grandfather opened an account for me to pay for a master’s degree. No BA, a MASTER’S DEGREE . This so that there would be no doubt about what I could achieve ”.

2. “Whoever has a store to attend to it”: And in the same way, whoever has savings and investments, keep an eye on them.

“My other grandfather was the smartest person to make investments because he was always informed. It taught me never to go into a business that I didn’t understand or to sign a contract that I hadn’t read.

3. Don’t screw your kids and plan your retirement: “My grandparents came to Mexico and they knew they wanted to die in it. At that time there were no Afores or retirement plans, but month after month they saved for that moment, even if it was at the cost of a luxury ”.

Adina pointed out that her grandparents always knew that they did not want to be a burden for their children when the time came and on the contrary, they always made an effort to have a dignified old age.

4. Finances are ALWAYS a family affair and especially a couple: Sometimes talking about money with your partner can unleash a pitched battle, but it is about being a team.

“There wasn’t a time when my grandmothers didn’t have a say in financial discussions because they ran the house. In those times, my grandparents had the last word, but they always decided between all of us ”, Adina recalls and points out that especially in times of crisis, her grandparents were precisely a COUPLE , partners.

“Today there is a lot of financial infidelity, individual debts, hidden problems and half truths. It makes me think that my grandparents were ahead of their time ”.

5. There is nothing more patriotic than building well-being for others: Adina’s grandparents lived committed to Mexico and providing jobs was always one of their most active priorities.

“As an immigrant you want to help the country that made you its own. There is nothing more patriotic than building well-being for others ”.

It doesn’t matter where we come from, Adina noted, whether from immigrants, born savers, born profligates, or parents who simply did what they could with what they had. “Learning from the past and the financial history that shaped us is essential to build your future.

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Learn to read the news to earn money

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It seems that the economy is going crazy, but as an entrepreneur you must be aware of what is happening in the world. Journalist Isabella Cota tells us how to understand those numbers and trends that we see every day.

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October 24, 2020 4 min read

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

“Where were you when you realized that the pandemic was going to change your life?”

For Isabella Cota , a journalist specializing in macroeconomic issues, that moment of cold drop came when she was attending a wedding at the end of February and a friend involved in the health industry told her that at some point in the year the stock markets were going to collapse, large amounts of infections would occur and that, if the government did not act soon, a health crisis like no other would occur.

Just a few days later, the National Healthy Distance Day would begin, which practically stopped the country’s non-essential economic activity.

Perhaps the force of the spread of COVID-19 took many by surprise, but Cota asserts that “many people who were used to reading the news saw the pandemic coming and were able to take protective measures even before the authorities.”

For the journalist, information is the best tool that people can access for free to make critical decisions for their health and finances.

“If you want to invest your money well, you have to understand money and for that, you have to read news about economy, finance and yes, science,” said the expert in her participation in the virtual MoneyFest festival.

However, in Mexico we have a stigma with numbers and it is the job of the media to explain to the reader how economic news affects their daily life.

“If the medium does not land that information, it is the MEDIA that is failing the public, not the other way around.”

Image: MoneyFest 2020

How to read the news to help you earn more money

Isabella Cota gives us a three-point checklist to consume financial news to make better decisions.

1. “Cure your fright” with curiosity: You have to ask yourself questions, but don’t panic. “If there is something that the pandemic has given us all, it is fear. Fear of getting infected, losing a job, saying goodbye to a loved one, etc. ”, says Cota. “We must approach the information without fear and not let ourselves be carried away by alarmist news.”

Given this, it is drastic to remember that the headlines do not report and you have to look for different sources.

2. Google is your friend: “The media are like great libraries of stories,” says Isabella. “Before making any financial decision, you have to ask Google what the media says about a brand or investment opportunity that they advertise, what information the bank can ask you by law, what are your rights before collectors, etc.”

3. You don’t have to believe everything: One of the most unfortunate effects of the pandemic has been the spread of false information that is sold as news and is not. “A study says that there are already 800 people in the world who die because of the fake news about the coronavirus.”

So how can we identify real news?

Isabella offers this “accordion” to quickly identify credible information:

  • When the notes or links come without a real or reputable source, do not open them .
  • If the information comes from a medium that you don’t recognize, don’t read it .
  • Finally, if what the article says does not seem true or reasonable, do not share it .

“The media fails, but they also offer fascinating stories. These stories are important and they teach us something. The information that is consumed with calm, curiosity and an open mind, is the best tool for our money ”, concludes Cota.

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The world has already changed: How to design a new professional and personal reality

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Silvia Singer, general director of the Interactive Museum of Economics, gives us the keys to transform ourselves into this new normal that, like it or not, is here to stay.

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October 24, 2020 4 min read

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

“The world stopped and I feel so bad that I don’t want to talk to anyone. It’s a feeling that we’ve all had in the last few months, ”said Silvia Singer , in her talk at Money Fest , Mexico’s interactive personal finance festival. “However, if there is a crisis, I am sure there must be an opportunity.”

With this phrase, general director of the Interactive Museum of Economics (MIDE) , told us that this is the time to make a change to face the new normal.

“Every museum is due to its public, but what happens when people cannot go?” This was the challenge that MIDE faced in March when Sana Distancia measures began to stop the spread of COVID-19 .

“We had to acknowledge that there was a crisis that was going to last, we needed to make changes and restart,” Singer explained when presenting how MIDE had to transform its strategy to focus on the digital public. “Now the museum is beyond Tacuba 17 in Mexico City; now it is for anyone inside and outside of Mexico who understands Spanish ”.

The MIDE has already opened its doors, but this digital strategy allowed them to transform.

In this regard, Silvia gave us the strategy to replicate the success of the MIDE in our businesses.

Image: MoneyFest 2020

How can we design a new professional and personal reality?

Pablo Picasso used to say that when the muse of inspiration visits you, she has to find you working.

“Entrepreneurship is a creative and at the same time critical act. There are no magic formulas to transform and there are many paths. Which is the best? Yours ”, indicated the general director of MIDE.
To generate your own strategy, according to the expert, it is required:

Being able to observe the environment: “First of all, you have to see the opportunities that are outside, understand what is happening and identify what things or situations require a different solution that works better in this new normal.”

Understand that change is constant: “It sounds obvious, but you have to remain agile and have an open mind to innovate.”

How I reinvent myself

Silvia Singer pointed out that you have to learn to think with a certain structure in order to transform yourself. A simple model that you can follow in your person and your business is:

1. Think about something that you have dreamed and imagined, but with some alternatives on how to achieve it: “I need a clear objective, to know where I want to go and what alternatives I have.”
2. Write down these alternatives honestly in a notebook with the advantages and disadvantages of each one: “Find realistic dreams with goals within reach and agree to be flexible in the method to achieve them.”

3. Be informed to be able to choose an alternative and take the step: “In order to be successful, you must be yourself, but reflect on what you can improve.”
4. Commit to what you have chosen and move on: “We all have huge desires, but our resources are limited. So you have to make a decision and commit to it ”.

In the end, the MIDE director gave great advice for all entrepreneurs who are looking to transform themselves: “You don’t have to suffer the process, you have to enjoy it. I’m sure that in the end everything will be fine ”.

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